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    IN THIS ARTICLE

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      Electronics Manufacturing
      27 Jul, 2023 / BY Daniella Baldock

      Electronic component market review - July 2023

      Main Highlights

      The first half of 2023 has seen the world talk again of rising inflation, high interest rates and recession. Despite this, the outlook on market growth globally still looks positive, with India (15.4%) and China (34.9%) taking the largest share of the total APAC growth forecast, contributing to 70% of total global growth forecasts for the year.

      During 2023, APAC has remained more resilient than other regions to global financial struggles, even so, their growth is expected to shrink compared to previous years. GDP in region is forecast to grow by 3.8% this year, compared to 4.7% in 2022.

      The UK interest base rate is now 5% - close to the historic levels seen in 2007-2008 before the global financial crisis hit, causing the deepest recession in terms of lot output since records began in 1955.

      In the Eurozone, Germany has reportedly seen a fall in manufacturing output, with the factory PMI figure down to 38.8 in July, from 40.6 in June.

      Capacity and lead-time issues

      • Whilst semiconductor shortages are still observed in certain technologies - MCUs specifically – the market in general is slowly improving with high-service distributors having more ex-stock availability and broadline distribution carrying increasing stock levels whilst also accepting orders to lead-time and pipelined inventories.
      • TSMC reported they would delay production at their new Arizona facility to 2025 as a result of skilled labour shortages. Its original operational target was 2024.
      • SIA (Semiconductor Industry Association) reported global semiconductor sales of $40.7bn during May 2023, an increase of 1.7% on April but this is still down on May 2022 where figures were $51.7bn.
      • Both TE and Molex are still having supply issues on-and-off. TE have been constrained for a number of quarters dating back to pre-covid and Molex have had bottlenecks for a similar period of time, becoming more obvious in the first half of 2023.
      • The USA/China tech war is still ongoing with more countries looking to implement export licences; notably the Netherlands, home to chip making equipment manufacturer ASML.
      • Generally, Allegro products are no longer on allocation. Selected Infineon products still have ongoing extended lead-time for MCU’s particularly, yet Texas Instruments availability is easing on consumer lines outside of automotive and hi-rel grade products.

      Manufacturer Mergers/Acquisitions

      • Western Digital and Kioxia have resumed merger talks this year looking to dominate the NAND Flash market share over Samsung.
      • Bosch are set to acquire US chip maker TSI Semiconductors and reportedly invest $1.5bn.
      • Intel have still not completed their acquisition on Tower Semiconductor 12 months on, with Intel reportedly making face to face efforts to resolve the delay caused by Chinese regulators.
      • NOTE EMS have expanded UK manufacturing capacity in a full acquisition of DVR Ltd.
      • American based Incap Corporation signed a deal on 1st July to acquire 100% of Pennatronics Inc., who were founded in Arizona in 1999. This supports Incap’s growth strategy in the US market.

      PCB Technology

      • Lunar New Year falls on Saturday 10th February 2024 and will celebrate the upcoming year of the Dragon. Due to factory shutdowns whilst events are celebrated it is advised to forecast and plan any PCB requirements for Dec 2023 – Feb 2024 well in advance. Although this may seem far away, we are rapidly progressing through the year and Lunar New Year almost always catches some OEMs out. Our advice would be to secure supply with your partners in good time, no later than November 2023.

      Pricing Uncertainty

      • Price increases are still being applied, but the increase and frequency of these has slowed from post-pandemic levels.

      Global Economy

      • Oil pricing is averaging between $80 and $90 per barrel, trading at $82.07 per barrel at time of writing.
      • Gold is no longer slowly climbing, and has dipped over the last three months, selling at £1,523.82 per ounce at time of writing.
      • Silver saw a small dip in pricing in June 2023, but has slowly climbed back to £19.20 per ounce, almost £1 lower than 3 months ago.
      • Steel rebar has fallen during the last quarter once again with 2 month contracts now at $560.50 per tonne.
      • Bitcoin is now valued at $29,247.60 per coin, up from January and April 2023 pricing.
      • Copper pricing has also fallen with bids today at $8,430 per tonne.

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      Tags: Electronics Manufacturing , Trends

      Written by Daniella Baldock

      Daniella is an experienced strategic sourcing specialist with over 12 years’ experience in the electrical and electronic manufacturing industry. Daniella’s core skills include negotiation, communication, supplier relationship management, and purchasing negotiation. Graduating from CIPS - The Chartered Institute in 2018, Daniella is a driven purchasing professional who plays a crucial role in driving ESCATEC's European sourcing strategy.